Making Money With Vending Machines -- What You Must Do (And Not Do)
Modern society is all about instant gratification -- giving people what they want, when they want it. And perhaps the epitome of the instant gratification business are vending machines. They are available where ever people congregate, it seems, and offer a vast array of products: Pop, water, energy drinks, cookies, candy, snack foods, sandwiches, coffee, gum, even hot foods.
Added to that is the fact that when you are making money with vending machines you're dealing with an all-cash business. They are also a scalable business opportunity -- many people begin making money with vending machines doing so on a part-time basis, servicing a few locations. When you are ready to expand your business, you can do so naturally and easily.
In order to make money with vending machines, the primary thing that you must do is control your costs -- your costs in four different areas.
In order to make money with vending machines you must first of all control the cost of your equipment purchases. This means several things: first of all, it means matching the type/size of vending machine to the area to be serviced, as well as to the products being offered. For example, many beginning vending machine two operators only place food or drink units -- yet if you are able to place a food and a drink unit side-by-side, it will often times be more profitable, as people who have eaten something will naturally want something to drink as well.
Controlling your equipment purchase cost may require you -- especially if you're just starting out -- to purchase used machines. It is possible to make really good money with vending machines that have been properly refurbished -- but it is critical that you choose to work with a trustworthy vendor, as if your machines break down frequently, this will generate complaints, and perhaps even lead to a request for your machines to be removed altogether.
This leads me to my second point: if you are going to be serious about making money with vending machines, you must control the cost of your equipment repair. All vending machines will need periodic servicing. Are you set up to handle this? Do you have the know-how to service these machines yourself -- or do you have people working for you who can do this? If you don't have this knowledge, then you are going to have to pay to have someone else repair your machines, and these additional charges are going to impact your bottom line. If you are just beginning a vending business, it would be well to learn how to repair these units as well.
A third area where you will need to control your costs is in the area of the purchase of your food items. It will be impossible for you to make money with your vending machine business if you must rely on a food supplier that does not charge a competitive price. Overpaying on food items will eat into your profit margins significantly.
Remember that the price that you charge your customers for the purchase of the food you sell must cover all of your costs -- equipment purchases, repairs, employee salaries, transportation, etc. -- as well as provide you with a profit. So consider carefully any potential food suppliers -- compare the quality of their offerings, and scrutinize in detail their pricing structure. Negotiate the absolute best price you can for your wholesale vending machine food prices.
The final major area of cost control in a vending machine business is that relating to personnel costs. This may not be a major concern for you if you are just starting out, but in order to make significant money with vending machines you will need to grow your business to the point where you have placed many machines in many different locations -- and to do this you're going to need help.
It is all well and good to structure your business to generate some extra cash when you and your family are using your free time to operate it -- it is a very different thing to try and make money with vending machines when you have to pay route men, make tax and Social Security payments, health insurance and 401(k) payments, unemployment compensation, etc.
As your vending machine business begins to grow and you start to take on employees, get some expert assistance on handling these matters -- making mistakes in this area can torpedo your business, wiping out years and years of hard work.
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